Williams Sues Merger Partner Energy Transfer

By Anne Steele 

Williams Cos. filed lawsuits against Energy Transfer Equity L.P., accusing its planned acquirer and Chief Executive Kelcy Warren of violating the merger agreement with a private offering of debt aimed at funding the $32.6 billion tie-up.

Williams said the private offering provides select Energy Transfer investors with preferential treatment on distributions. Despite the lawsuit, Williams said it is committed to completing the transaction -- expected to close in the second quarter--"as soon as possible."

Representatives from Energy Transfer were unavailable for immediate comment.

Last month, Energy Transfer issued convertible units to certain investors, including Mr. Warren, to raise funds to help cover the $6 billion it will owe Williams investors when the deal closes.

Williams' suit, filed in the Delaware Court of Chancery, seeks to unwind the private offering of the preferred units. A separate suit against Mr. Warren in a Texas district court alleged tortious, or wrongful, interference with the companies' Sept. 28 merger agreement as a result of the private offering.

"The litigation is intended to ensure that Williams' stockholders will receive the consideration to which they are entitled under the merger agreement," Williams said.

Energy Transfer agreed to acquire Williams in September in a deal that will create a massive U.S. network of natural-gas pipelines. Williams last year had resisted Energy Transfer's initial buyout overture but eventually accepted a lesser price amid slumping energy stocks.

Energy Transfer shares, battered 79% over the past 12 months, rebounded 4% to $6.70 in early trading, while Williams shares, down 71% in the same period, edged 0.7% lower to $14.72.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

April 06, 2016 11:18 ET (15:18 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.